Shared ownership

Shared ownership schemes are drastically failing to deliver an affordable route to homeownership for too many people, while subjecting buyers to rising rents, uncapped service charges, and a disproportionate exposure to repair and maintenance costs, MPs have said.

In a new report, the Levelling Up, Housing and Communities Committee finds that rents, service charges and the complexity of homeownership leases make shared ownership an unbearable reality for many people seeking to take the step to become full, 100% homeowners.

The report calls for the government to take urgent and significant action to reform how shared ownership schemes currently operate so they can deliver an affordable route to homeownership.

The shared ownership model enables people to buy a share in a property, usually from a housing association, and pay subsidised rent on the rest. Sometimes known as ‘part buy, part rent’, shared ownership requires a smaller deposit and mortgage, making it, in theory, a more affordable route into homeownership than buying on the open market.

Clive Betts, the committee’s chair, said: “Shared ownership was hailed as an answer to the housing crisis especially for first-timebuyers. However, we have found that for too many people shared ownership becomes an unbearable reality, where a blizzard of charges and an unfair burden for maintenance and repair costs means that they are unable to afford full homeownership.

“Rising rents, hefty service charges, complex leases, disproportionate repairs and maintenance costs are experienced by too many people who take the shared ownership route. The government needs to take clear and urgent action to tackle these issues and ensure shared ownership genuinely delivers affordable homeownership.”

The report highlights the complexity of shared ownership leases and identifies a lack of a single, specialist source of independent and impartial advice for shared owners.

According to the report, the government and Homes England should improve the accessibility and quality of guidance and ensure providers offer the specialist advice needed to understand complex shared ownership leases.

The committee acknowledges there’s broad support for the improvements made to shared ownership leases in 2021 to address issues around costs and service but notes that these provisions do not extend to shared owners who own properties delivered under the previous Affordable Homes Programme (2016-2023).